CPK on the block?

The popular restaurant chain (aka California Pizza Kitchen) has been soliciting interest from potential buyers, including private-equity firms, the WSJ is reporting. Shares of the company are trading sharply higher, despite a rough 2009 and prospects of further sales declines this year. You're probably familiar with the backstory: Two lawyers, Rick Rosenfield and Larry Flax, team up on a casual dining concept that centers on a wood-burning pizza oven and they prove to be wildly successful. The company went through many iterations, and at one point in the late 1990s, when a private equity firm took control, the two founders were basically pushed aside. Then CPK fell on hard times and the board asked Rosenfield and Flax to come back as co-CEOs. When I profiled the two guys for Los Angeles magazine (August 2008, no link), I asked them about leaving. They didn't want to get into it much, but the topic was clearly on their minds.

Company founders who enter their sixties often have a hard time letting go--it's the legacy thing--and with two partners the endgame becomes even more dicey. What if Rosenfield wants to leave, but Flax prefers to stay on? What if the board starts getting itchy about bringing in younger executives? The issue of succession surfaces periodically, but Flax and Rosenfield brush it aside. When I invoke the "If you guys got hit by a truck tomorrow" question, the name they mention is Chief Financial Officer Susan Collyns. "In reality," says Rosenfield, "the company would go on just fine." As for the two of them, they know the day will come when they are no longer together--even if they don't want to think about it and certainly don't know how they will handle it. Driving back to the office one afternoon, without Flax, Rosenfield shakes his head. "The story of our life is that every important decision we've made in the last 35 years has been made together," he says. "My life wouldn't be the same without Larry."